Life Storage Ramps Up Dividend By 3.7%, Plans Stock Split

Life Storage announced a 3.7% increase in its quarterly dividend to $1.11 per share (or $4.44 on an annualized basis). The self-storage real estate investment trust or REIT also announced a 3-for-2 stock split.

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Life Storage (LSI), will pay the increased dividend on January 27, 2021, to shareholders of record on January 15, 2021.

The new dividend reflects an annual dividend yield of 3.7%.

The company also announced a 3-for-2 stock split of its common stock, which will be made in the form of a 50% stock dividend. Life Storage shareholders of record at the close of business on January 15, 2021, will receive one additional share of the common stock for every two shares they own. The additional shares will be distributed on January 27, 2021. Note that the new dividend will be paid on pre-split shares.

Life Storage said that cash will be distributed in lieu of fractional shares based on the closing price on the record date. Following the split, Life Storage’s outstanding shares will increase to 74.3 million shares from about 49.5 million. (See LSI stock analysis on TipRanks)

CEO Joe Saffire commented “As we deliver strong operating results and cash flows, we will continue to reward our shareholders. We are confident in the company and its growth prospects,”

In November 2020, Life Storage reported better-than-anticipated third-quarter revenue of $156.3 million, reflecting a 7.3% year-over-year rise. Life Storage’s FFO (fund from operations) grew 2% to $1.49.

Last week, Truist analyst Ki Bin Kim boosted the stock’s price target to $123 from $100 and reiterated a Hold rating as part of a broader research note on self-storage REITs. The analyst cited the continued momentum in the sector’s pricing power in December, with net rents increasing 19.7% year-over-year and improving on the 3-month average of 16.7%.

Kim expects same-store revenue growth to peak at about 4% by this year’s summer before returning to a more normal rate of about 2% in 2022.

Overall, Life Storage scores a Moderate Buy analyst consensus from the Street backed by 4 Buys and 2 Holds. The average price target of $126.50 suggests 9.6% upside potential from current levels. Shares have gained 14.9% in 2020.